People in companies change and grow; companies themselves tend to be inert
Viewing a LinkedIn video class on innovation, these two words kept popping into my mind: growth and change. In the past, I have amongst others been commissioned to develop new growth points for companies. Generally, these assignments are something like “Help us identify new markets with a €500M to €1B opportunity, something close to where we are now and some ideas more further out.” Generally, this consists of identifying new markets the company is not active in but for which they have 75% of assets and competences in place, and some markets for which they could scrape some relevant core competences but need to learn and grow in a completely new space. Typically, the short-term growth opportunity is taken and the others – read: long term and disruptive – put aside; the short terms prevails with the lowest risk and lowest internal impact above the long term with a higher risk profile, bigger internal impact but potentially a bigger result.
Running a company isn’t only about growing the company – although that is what most company leaders are looking for: organic growth. Running a company is also about continuous development, i.e. consciously taking and seeking a new position, sometimes leading, sometimes following, but definitely not lagging. And above all, making conscious choices about the future and taking risks.
All too often, innovation, growth and development are discussed in the context of evolution and Darwinistic thinking. Evolution in biology is on the one hand a process of millions of years, i.e. very long term, and on the other hand an ongoing process, every single second through copy mistakes each time a cell divides. The continuous change in the outside world defines which of these serendipitous copy mistakes will be advantageous and will survive – the fittest set of characteristics given the environmental pressures. And in all circumstances, change will happen.
In business, these environmental pressures are also present: new technologies on the horizon, competitive pressures, regulatory pressures, etc. The potential impact of these pressures, these changes in the external environment, is increasing with an increasing speed of change – not just as a result of change itself. The key observation is that we as a world, as interconnected societies, are now in an age of continuous change – technology has enabled this. Many traditional (read: corporate or incumbent) companies are still showing coping behavior regarding change (as given the example above) choosing minimal internal impact vs. maximum external impact. These companies stay in coping behavior instead of getting in the habit of learning to adapt quicker and better to changes – to change oneself, continuously.
To give another example is a well-known HealthTech company which has recently voiced the need to become customer obsessed, i.e. not just customer centric. They have approached, quite traditionally, one of the four global business consultancies to help them. Experience shows that you don’t become more consumer centric, let alone obsessed, by following an internal training (which is nearly always how these programmes are executed). If customer centricity is a problem, it nearly is always a result of the company being driven by the wrong key metrics.
If you drive your business by short term shareholder value, you will never become truly customer centric; you are de facto money and not value centric.
If you’re new opportunity requires a different IT system but leadership pushes you to work within existing systems, you not customer centric, you are process centric. Becoming truly customer centric or even, if you so wish, customer obsessed, you need to change the mind-set, the behaviour, dare to do things differently. This is true at least in traditional, incumbent environments. Because, as we all can witness on a day-to-day practice, start-ups are from birth connected to the momentum in the market and the needs, wishes or even whims of their customer; they are not bogged down by shareholders, they are not bogged down by processes – they are free to move and to move quickly.
Changes can absolutely feed growth and development; growth in the context of learning, stretching one’s imagination, experimentation and failure. The challenge in business is not just to accept change but to adopt change and to steer this change towards growth. This is the challenge for leadership: creating the right conditions to enable change. Whereas in nature change is serendipitous, change in business is essentially a conscious and pro-active decision, i.e. a conscious decision to do things differently, to move in a direction, to e.g. grow in a space that is still available for growth but also with some (mid – long term) risk involved, where you can be the first with the characteristics to not only survive but also thrive.
People change and learn first, and as a consequence, companies change and grow.
To change is to grow. It’s a force of nature.
